11:01pm

Wed February 1, 2012
Election 2012

Sour Economy Has Nevada Looking For New Jackpot

Originally published on Thu February 2, 2012 4:35 am

It's noon on the Las Vegas Strip, and the barker outside O'Shea's Casino is hard at work.

"Twenty-four-hour happy hour, 24-hour $5 blackjack and 24-hour beer pong action going on right here today," he says. Dressed in a lime green tuxedo, he's doing his best to get tourists to come in.

Despite the recession, nearly 39 million visitors came to the city last year, the second-highest number in Las Vegas history. The problem is those tourists don't have as much money as they once did.

One tourist, Genina Jackson, says that after a decade since her last visit, she notices the difference. "Ten years ago, people dressed up a little more," she says. "I see a lot of jeans and flip-flops."

Jackson had stopped along the Strip in front of the huge fountains at Caesars Palace to take a picture with her friend Melissa. They are in from Atlanta celebrating Melissa's birthday.

"The casino is not as crowded. You can get to any table. Before, 10 years ago, you couldn't get to a table," Jackson says.

Boom And Bust, Vegas Style

Vegas has had a great ride since Jackson was last there.

For most of the past decade, southern Nevada was the fastest-growing region in the nation.

Mo Denis, a Democratic state senator, says officials in Vegas were opening a new school every 20 days.

"We built 18 high schools ... 33 middle schools, 60-something elementary schools in an eight-year period," he says.

The bust has been equally dramatic, he says. Unemployment hovers around 13 percent, and nearly half of all the homes sold in the state are in foreclosure.

That's had a huge impact on the state's budget. Legislators had to close a multimillion-dollar deficit last year. To do so, they left in place some old tax hikes and also made big cuts to education, prisons and health care.

David Damore, a political scientist at the University of Nevada, Las Vegas says the budget battle got people to start looking for new revenues beyond gaming and tourism.

"So you're starting to get people to realize that, OK, well maybe we need to start thinking about this here, and that's revolutionary thinking here," says Damore.

Crafting A New Jackpot

One place eyes are turning: the state's lucrative mining industry.

Nevada extracts nearly 80 percent of all the gold mined in the United States. Yet those companies pay lower taxes than casinos and hotels — tax rates the industry wants to protect.

The mining industry recently launched a public relations campaign touting its contributions to the state.

NPR's Planet Money visited one gold-mining boomtown, Elko, last year and reported on the visit in a podcast. Some residents there are "giddy" and ambitious, but remain wary.

Steve Hill, the governor's new director of economic development, says taxing a specific industry that's booming is easy, but he questions what happens when it, too, hits a lull.

"You're probably setting up the possibility that, down the road, that industry's not doing so well, and what you thought was a stable revenue stream is not anymore," Hill says.

Hill says the state needs to move now to attract new industries such as high-tech, specialized manufacturing and health care.

"There is a sense of urgency right now that you can't duplicate when times are good," says Hill.

Yet, that urgency won't be met this year. Nevada's Legislature only meets once every other year, and this is an off-year.

Three other states — Montana, North Dakota and Texas — meet biennially, according to the National Conference of State Legislatures. Some say meeting every other year guards against superfluous legislation.

So, instead of new initiatives, the state is set to take out a $160 million loan to get through the year.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

RENEE MONTAGNE, HOST:

The recession has been over officially since 2009 - not that you can tell in many places in America. The effects of the downturn have been particularly cruel in Nevada.

STEVE INSKEEP, HOST:

That's right. The state has the nation's highest unemployment rate and highest foreclosure rate. And to say the least, all of this has made the state's budget situation difficult.

MONTAGNE: As we continue our look at state finances, NPR's Carrie Kahn tells us about Nevada's hopes of broadening its tax base beyond the mainstays of tourism and gambling.

CARRIE KAHN, BYLINE: It's noon on the Las Vegas strip, and the barker outside O'Shea's Casino is hard at work.

UNIDENTIFIED MAN: Twenty-four-hour happy hour, 24-hour $5 black jack...

KAHN: Dressed in a lime green tuxedo, he's doing his best to get the tourists to come on in.

UNIDENTIFIED MAN: ...24-hour beer pong action going on right here today inside O'Shea's...

KAHN: Nearly 39 million visitors came to the city last year, the second highest number in Vegas history. The problem is those tourists don't have as much money as they used to. Genina Jackson says she's noticed that.

GENINA JACKSON: Ten years ago, well, people dressed up a little bit more. I see a lot of jeans and flip-flops.

KAHN: She stopped me on the Strip in front of the huge fountains at Cesar's Palace to take a picture of her and her friend Melissa. They're in from Atlanta. It's Melissa's birthday.

JACKSON: The casinos are not as crowded. You can get to any table. Before, 10 years ago, you couldn't get to a table.

KAHN: The city had a great ride since Jackson was last in Vegas. For most of the past decade, Southern Nevada was the fastest-growing region in the nation. Mo Denis, a Democratic state senator, says in the city, they were opening a new school every 20 days.

STATE SENATOR MO DENIS: We built 18 high schools, 33 middle schools, 60-something elementary schools in an eight-year period.

KAHN: Denis says the bust has been equally dramatic. Unemployment hovers around 13 percent, and nearly half of all the homes sold in state are in foreclosure. That's had a huge impact on the state's budget. Legislators had to close a multi-million dollar deficit last year. To do it, they left in place some old tax hikes and also made big cuts to education, prisons and healthcare.

David Damore, a political scientist at the University of Nevada, Las Vegas says the budget battle got people to start looking for new revenues beyond gaming and tourism.

DAVID DAMORE: So you're starting to get people to realize that, OK, well, maybe we need to start thinking about this, here. And, you know, that's revolutionary thinking, here.

KAHN: One place eyes are turning: the state's lucrative mining industry. Nevada extracts nearly 80 percent of all the gold mined in the United States, yet those companies pay lower taxes than casinos and hotels, tax rates the industry wants to protect.

(SOUNDBITE OF ADVERTISEMENT)

UNIDENTIFIED MAN: Look who benefits from Nevada mining, because mining creates more than 50,000 jobs.

KAHN: It recently launched a PR campaign touting its contributions to the state.

(SOUNDBITE OF ADVERTISEMENT)

UNIDENTIFIED MAN: In good times and hard times, mining is working for Nevada families, working for you.

KAHN: Steve Hill, the governor's new Economic Development head, says taxing a specific industry that's booming is easy. But what happens when it, too, hits a lull?

STEVE HILL: You're probably setting up the possibility that down the road, that industry's not doing so well, and what you thought was a stable revenue stream is not anymore.

KAHN: Hill says the state needs to move now to attract new industries, high tech, specialized manufacturing and health care.

HILL: There is a sense of urgency right now that you can't duplicate when times are good.

KAHN: But Nevada's legislature only meets once every other year, and this is an off year. So instead of new initiatives, the state is set to take out a $160 million loan to get through the year.

Carrie Kahn, NPR News. Transcript provided by NPR, Copyright NPR.